Ruminations and Fulminations

Transparency Is The Best Online Policy

Jorg Pierach, who created the consumer engagement firm Fast Horse, is a great friend of this blog. He writes for the seven people who read Finance and Commerce, and his latest piece is well worth doubling his readership by posting on TSRC. At the end of the piece I’m adding a thought from The New York Times Sunday Magazine, also about the perils of manipulating the wild free spaces of the internet.

Jorg’s piece: Transparency Is The Best Online Policy

Can you keep a secret?

Some marketers and corporate executives continue to ask that question online, only to find out the hard way that the internet will untimately dish like Joan Rivers at a sleepover.

When it comes to deceptive or careless online marketing or reputation management practices, there is simply not enough bandwidth to hide behind, and, more than ever, that sort of corporate behavior will inevitably create bad results, from red faces to hits to the stock price. Or worse. As they should.

Normally sure-footed Target Corporation is just the latest to learn that lesson. The company was recently “outed” by a college student wary of seemingly less-than-transparent efforts to build buzz for Target brand on the wildly popular Facebook site. A member of the Target Rounders, a group of mostly college-age students who are given discounts and prizes for sharing their love of Target with friends, the student took issue with an appeal from the company to “try not to let on in the Facebook group that you are a Rounder.” She quickly posted her concerns on Facebook, the story was picked up by bloggers, then the media, and before you can say “Expect More. Pay Less,” the cat was officially out of the red-bullseye-logoed bag.

In this case, Target’s vendor behind the initiative took responsibility for what it called a “miscommunication,” and, in full damage-control mode, moved quickly to clarify. Target’s great reputation gives them a deep reservoir of goodwill to draw on in this case, and no doubt fallout from this sloppy online buzz-building initiative will result in minimal harm to the company’s business and reputation.

But often the stakes are much higher. Earlier this summer, Whole Food CEO John Mackey found himself in the unenviable postion of having to explain his seven-year effort to prop up his company’s reputation and denigrate his chief competitor’s on a Yahoo! Finance forum. Writing under a pseudonym, Rahodeb (a scrambled version of his wife’s name), Mackey posted more than 1,000 times over a seven-year span. His posts mostly touted his company’s prospects and financial performance, and occasionally took aim at those of rival Wild Oats. Rahodeb even questioned why on earth any company would want to acquire Wild Oats, which had been long rumored as a takeover prospect for Whole Foods. Many in the forum weren’t fooled, calling Mackey out by name in responding to Rahodeb posts. Earlier this year, the veil finally came off and Rahodeb’s true identity was confirmed in a court filing related to Whole Foods efforts to acquire Wild Oates. The result was a legal inquiry that threatened the deal and resulted in widespread negative press for the company. Mackey explained away his shenanigans as simply good, clean, CEO fun. While the Wild Oats deal ultimately went through, the legal costs associated with Mackey’s seven-year hobby are still proving a drag on the company’s stock and reputation.

In response to all of this, Whole Foods has put a new policy in place governing online behavior by corporate executives. Without approval from the governance committee, the policy states, no corporate leader is permitted to “make any posting to any noncompany sponsored Internet chat room, message board, Web log (blog) or similar forum concerning any matter involving the company, its competitors or vendors, either under their name, anonymously, under a screen name or communicating through another person.” Violation is grounds for dismissal and perhaps a lobotomy, given the company’s recent lessons.

I’m not for wordy, over-the-top corporate attempts to inspire and police the right online behavior among employees. Enter the online world with trepidation and you’ll never gain the full benefit of what it has to offer as a way to engage stakeholders. Companies who have embraced the potential of corporate blogging, social networking, and Web 2.0 are far less likely to have to muzzle employees, who, frankly, are those in the best position to build the kind of trust that comes with transparency.

Microsoft has very clean, simple corporate policy when it comes to this issue: “Don’t be stupid.”

Seems to me that hits the bullseye.

Thus endeth the lesson from the Jorgster.

This Sunday’s New York Times Magazine looks at how presidential candidates are creating buzz on the web. The piece says Howard Dean four years ago was a web phenom not because he had a good web plan and not because he manipulated fake web-grass roots but because his campaign, “almost by accident, became channeled by people he had never met.” The Times continued, “In the new and evolving online world, the greatest momentum goes not to the candidate with the most detailed plan for conquering the Web but to the candidate who surrenders his own image to the clicking masses, the same way a rock guitarist might fall backward off the stage into the hands of an adoring crowd.”

Planting questions or blog comments might seem smart and might be billable, but in the end, we hope, what’s real is what works.

In Howard Dean’s case and other like it, I think this metaphor makes sense:

A great “Web strategy” without excited people to breathe life into the strategy is like a Porsche without gas. It’s going to look great on the driveway, and maybe your friends can help you push it, but that thing ain’t going anywhere fast until you fill the tank.

So, the best way to find success on the Web is to be interesting in person. That’ll put gas in the car, then you need to do the best you can to drive that car toward victory lane.

Target and Howard Dean are capable of encouraging and shaping participation on the Web, but you can’t simply invent enthusiasm by starting a blog.